Temp vs permanent hiring

Pros, cons and cost analysis 

Temp vs permanent hiring
Temp vs permanent hiring

posted 22 Apr 25

Search Editorial Team

In today’s job market, hiring the right people - at the right time - has never been more important. But as the landscape shifts, many businesses are asking: is it better to hire temporary or permanent staff? 

With UK job vacancies falling for 29 consecutive periods, now sitting at 818,000 according to the Office for National Statistics, businesses are tightening up how they build their teams. Hiring decisions aren’t just about speed anymore. They’re about flexibility, cost, skill fit, and long-term strategy. 

Here’s a clear breakdown of temp vs permanent hiring in the UK, so you can decide what makes the most sense for your business right now. 

Temporary hiring: pros and cons 

Temporary or contract hiring gives businesses flexibility, whether you're reacting to seasonal demand, short-term projects or staffing gaps. 

Pros 

  • Workforce flexibility: Quickly scale your team up or down in response to business needs, without long-term commitments.

  • Faster hiring process: Temporary candidates are often ready to start immediately, reducing downtime and delays. 

  • Lower short-term costs: You’re not committing to ongoing salaries, pensions, or benefits - helping keep overheads lean. 

  • Access to specialist skills: Bring in niche expertise for a short time, whether it’s a project-based designer or an interim finance lead. 

  • Try before you buy: Trial candidates in real roles before offering them permanent contracts through a temp-to-perm model. 

Cons 

  • Higher hourly or daily rates: Temps may cost more upfront, especially for in-demand skill sets. 

  • Lower long-term engagement: Temporary staff may be less connected to your business goals and culture. 

  • Onboarding and training repetition: Replacing and retraining new temps can take up time and resources. 

Permanent hiring: pros and cons 

Permanent employees form the backbone of most businesses - offering loyalty, deeper involvement, and long-term value. 

Pros 

  • Team stability and lower turnover: With security in their role, staff are more likely to stay, grow and contribute over time. 

  • Stronger cultural alignment: Permanent hires are more likely to understand and reflect your company values and working style. 

  • Skills development and retention: You can train, upskill, and develop people long-term, helping close skill gaps internally. 

  • Improved employer branding: A stable, committed team helps position your business as a great place to work, which in turn attracts better candidates. 

Cons 

  • Higher financial commitment: Salaries, benefits, pensions and training all require long-term investment. 

  • Slower hiring process: Finding the right person takes time, often more time than a temporary search. 

  • Reduced flexibility: Permanent headcount is harder to scale back in downturns or periods of change. 

Cost considerations 

Hiring always comes with cost, but how those costs are distributed depends on the type of employment. 

Temporary hires may include: 

  • Recruitment agency fees 

  • Higher hourly/day rates 

  • Holiday pay (statutory 5.6 weeks pro-rata) 

  • National Insurance contributions 

  • Employer pension contributions (auto-enrollment) 

You avoid long-term obligations, but recurring onboarding and training can add up. 

Permanent hires may include: 

  • Base salary 

  • Paid leave and sick pay 

  • Pension contributions 

  • Ongoing training and development 

  • Onboarding and retention costs 

While the upfront investment is larger, long-term value is typically higher, especially if you retain and develop your team. 

When to choose temp vs permanent hiring 

Every business is different, but asking the right questions can help guide your choice: 

1. What’s the nature of the role? 

If it’s project-based, seasonal or short-term, temporary hiring often makes more sense. If it supports ongoing business operations or requires deep involvement, permanent might be the better fit. 

2. What does your industry typically favour? 

Some sectors rely heavily on temp staff — think construction, industrial, healthcare, and logistics. Others prioritise permanent headcount for continuity, like finance, admin, or senior leadership. 

3. Where is your business in its growth journey? 

Startups or scaling teams often use temp staff to stay agile. More established companies tend to build around a core permanent team. 

4. What’s your budget tolerance for now — and later? 

Temporary staff reduce short-term cost risk, but permanent hires usually offer better long-term ROI. 

The hybrid model 

You don’t have to choose one or the other. Many businesses today use a blended approach — hiring permanent staff for essential roles, while flexing around them with temporary workers during busy periods, projects or talent gaps. 

A hybrid strategy offers flexibility, while still building a committed, stable team over time. 

Final thoughts 

There’s no one-size-fits-all answer when it comes to temp vs permanent hiring. It depends on your current needs, future goals, industry standards, and internal resources. 

But understanding the trade-offs — from cost to culture — can help you make smarter decisions that serve your business in the long run. 

Need help finding the right hiring mix? Speak to our specialist recruiters at Search to build a staffing strategy that balances flexibility, budget, and growth. Get in touch today.